Carrying value as of the balance sheet date of obligations incurred and payable. pertaining to goods and services received from vendors; and for costs that are statutory in nature, are incurred in connection with contractual obligations, or accumulate over time and for which invoices have not yet been received or will not be rendered. Examples include taxes, interest, rent, salaries and benefits, and utilities.

For an unclassified balance sheet, the amount due from customers or clients for goods or services that have been delivered or sold in the normal course of business, reduced to their estimated net realizable fair value by an allowance established by the entity of the amount it deems uncertain of collection.

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at fiscal year-end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, and unrealized gains and losses on certain investments in debt and equity securities as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of APIC associated with common AND preferred stock. For APIC associated with only common stock, use the element Additional Paid In Capital, Common Stock. For APIC associated with only preferred stock, use the element Additional Paid In Capital, Preferred Stock.

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

The aggregate value (measured at the lower of net carrying value or fair value less cost of disposal) for assets of a disposal group, including a component of the entity (discontinued operation), to be sold or that has been disposed of through sale, as of the financial statement date.

Carrying amount as of the balance sheet date of long-lived, depreciable assets that include building structures held for productive use including any addition, improvement, or renovation to the structure, such as interior masonry, interior flooring, electrical, and plumbing.

Includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits should not be reported as cash and cash equivalents.

Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. This caption alerts the reader that one or more notes to the financial statements disclose pertinent information about the entity's commitments and contingencies.

Dollar value of issued common stock whether issued at par value, no par or stated value. This item includes treasury stock repurchased by the entity. Note: elements for number of common shares, par value and other disclosure concepts are in another section within stockholders' equity.

Including the current and noncurrent portions, carrying amount of debt identified as being convertible into another form of financial instrument (typically the entity's common stock) as of the balance-sheet date, which originally required full repayment more than twelve months after issuance or greater than the normal operating cycle of the company.

Aggregate carrying value as of the balance sheet date of the liabilities for all deferred compensation arrangements. Represents currently earned compensation under compensation arrangements that is not actually paid until a later date.

The cumulative amount for all deferred tax liabilities as of the balance sheet date arising from temporary differences between accounting income in accordance with generally accepted accounting principles and tax-basis income that will result in future taxable income exceeding future accounting income.

The cumulative difference between the rental payments required by a lease agreement and the rental income or expense recognized on a straight-line basis, or other systematic and rational basis more representative of the time pattern in which use or benefit is granted or derived from the leased property, expected to be recognized in income or expense over the term of the leased property, by the lessor or lessee, respectively. Such receivable should be reduced by allowances attributable to, for instance, credit risk associated with a lessee.

Total carrying amount of consideration received or receivable as of the balance sheet date representing potential earnings that were not as yet recognized as revenue or other forms of income in conformity with GAAP.

Total investments in (A) an entity in which the entity has significant influence, but does not have control, (B) subsidiaries that are not required to be consolidated and are accounted for using the equity and or cost method, and (C) an entity in which the reporting entity shares control of the entity with another party or group. Includes long-term advances receivable form a party that is affiliated with the reporting entity by means of direct or indirect ownership.

Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future.

The limited partner's ownership share in the capital account balance. The limited partners are partners of a publicly traded limited partnership or master limited partnership. Limited partners have limited liability and do not manage the partnership.

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

Total of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity which is directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest).

Including the current and noncurrent portions, carrying value as of the balance sheet date of all notes and loans payable (with maturities initially due after one year or beyond the operating cycle if longer).

For an unclassified balance sheet, an amount representing an agreement for an unconditional promise by the maker to pay the Entity (holder) a definite sum of money at a future date, net of any write-downs taken for collection uncertainty on the part of the holder. Such amount may include accrued interest receivable in accordance with the terms of the note. The note also may contain provisions and related items including a discount or premium, payable on demand, secured, or unsecured, interest bearing or noninterest bearing, among myriad other features and characteristics.

Carrying amount as of the balance sheet date of assets not otherwise specified in the taxonomy. Also serves as the sum of assets not individually reported in the financial statements, or not separately disclosed in notes.

Carrying amount as of the balance sheet date of liabilities not otherwise specified in the taxonomy. Also serves as the sum of liabilities not individually reported in the financial statements, or not separately disclosed in notes.

Dollar value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) whether issued at par value, no par or stated value. This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity.

Represents a total which may include the following: (1) land available-for-sale; (2) land available-for-development; (3) investments in building and building improvements; (4) tenant allowances; (5) developments in-process; (6) rental properties; and (7) other real estate investments.

The carrying amounts of cash and cash equivalent items which are restricted as to withdrawal or usage. Restrictions may include legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with others, or entity statements of intention with regard to particular deposits; however, time deposits and short-term certificates of deposit are not generally included in legally restricted deposits. Excludes compensating balance arrangements that are not agreements which legally restrict the use of cash amounts shown on the balance sheet. This element is for unclassified presentations; for classified presentations there is a separate and distinct element.

Total of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

Total of Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity including portions attributable to both the parent and noncontrolling interests (previously referred to as minority interest), if any. The entity including portions attributable to the parent and noncontrolling interests is sometimes referred to as the economic entity. This excludes temporary equity and is sometimes called permanent equity.

Including the current and noncurrent portions, carrying value as of the balance sheet date of uncollateralized debt obligations (with maturities initially due after one year or beyond the operating cycle if longer).

This element represents costs incurred by the lessor that are (a) costs to originate a lease incurred in transactions with independent third parties that (i) result directly from and are essential to acquire that lease and (ii) would not have been incurred had that leasing transaction not occurred and (b) certain costs directly related to specified activities performed by the lessor for that lease. Those activities are: evaluating the prospective lessee's financial condition; evaluating and recording guarantees, collateral, and other security arrangements; negotiating lease terms; preparing and processing lease documents; and closing the transaction. This element is net of accumulated amortization, combined with, for an unclassified balance sheet, the carrying amount (net of accumulated amortization) as of the balance sheet date of capitalized costs associated with the issuance of debt instruments (for example, legal, accounting, underwriting, printing, and registration costs) that will be charged against earnings over the life of the debt instruments to which such costs pertain.

Including the current and noncurrent portions, carrying amount of debt identified as being exchangeable into another form of financial instrument (typically the entity's common stock) as of the balance-sheet date, which originally required full repayment more than twelve months after issuance or greater than the normal operating cycle of the company.

Total investments in Toys "R" Us: (A) an entity in which the entity has significant influence, but does not have control, (B) subsidiaries that are not required to be consolidated and are accounted for using the equity and or cost method, and (C) an entity in which the reporting entity shares control of the entity with another party or group. Includes long-term advances receivable form a party that is affiliated with the reporting entity by means of direct or indirect ownership.

The valuation allowance as of the balance sheet date to reduce the gross amount of receivables to estimated net realizable value, which would be presented in parentheses on the face of the balance sheet.

Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury.

Total number of shares of common stock held by shareholders. May be all or portion of the number of common shares authorized. These shares represent the ownership interest of the common shareholders. Excludes common shares repurchased by the entity and held as Treasury shares. Shares outstanding equals shares issued minus shares held in treasury. Does not include common shares that have been repurchased.

Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt.

Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased.

For an unclassified balance sheet, the accumulated amortization, as of the reporting date, which represents the periodic charge to earnings of initial direct costs which have been deferred and are being allocated over the lease term in proportion to the recognition of rental income, combined with, for an unclassified balance sheet, the accumulated amortization, as of the reporting date, representing the periodic charge to earnings of deferred costs which are associated with debt obligations existing as of the end of the period.

Total investments in Alexander's: (A) an entity in which the entity has significant influence, but does not have control, (B) subsidiaries that are not required to be consolidated and are accounted for using the equity and or cost method, and (C) an entity in which the reporting entity shares control of the entity with another party or group. Includes long-term advances receivable form a party that is affiliated with the reporting entity by means of direct or indirect ownership.

The valuation allowance as of the balance sheet date to reduce the amount of Mezzanine Loans receivables to estimated net realizable value, which would be presented in parentheses on the face of the balance sheet.

The valuation allowance as of the balance sheet date to reduce the gross amount of straight-line rent receivables receivables to estimated net realizable value, which would be presented in parentheses on the face of the balance sheet.

The current period expense charged against earnings on long-lived, physical assets not used in production, and which are not intended for resale, to allocate or recognize the cost of such assets over their useful lives; or to record the reduction in book value of an intangible asset over the benefit period of such asset; or to reflect consumption during the period of an asset that is not used in production.

The difference between the carrying value and the sale price of real estate or properties that were intended to be sold or held for capital appreciation or rental income. This element refers to the gain (loss) included in earnings and not to the cash proceeds of the sale. This element is a noncash adjustment to net income when calculating net cash generated by operating activities using the indirect method.

The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line.

This element represents the income or loss from continuing operations attributable to the economic entity which may also be defined as revenue less expenses and taxes from ongoing operations before extraordinary items, cumulative effects of changes in accounting principles, and noncontrolling interest.

The amount of income (loss) from continuing operations available to each share of common stock outstanding during the reporting period and each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the reporting period.

This element represents the overall income (loss) from a disposal group that is classified as a component of the entity, net of income tax, reported as a separate component of income before extraordinary items and the cumulative effect of accounting changes, which is apportioned to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This item includes the following (net of tax): income (loss) from operations during the phase-out period, gain (loss) on disposal, provision (or any reversals of earlier provisions) for loss on disposal, and adjustments of a prior period gain (loss) on disposal.

This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. Such amount typically reflects adjustments similar to those made in preparing consolidated statements, including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets of the investee at the date of investment.

Income derived from investments in debt and equity securities and on cash and cash equivalents. Interest income represents earnings which reflect the time value of money or transactions in which the payments are for the use or forbearance of money. Dividend income represents a distribution of earnings to shareholders by investee companies.

Amount of direct costs of an unsuccessful business combination including legal, accounting, and other costs that were charged to expense during the period, but may have been capitalized had the contemplated transaction been completed.

The portion of consolidated profit or loss for the period, net of income taxes, which is attributable to the parent. If the entity does not present consolidated financial statements, the amount of profit or loss for the period, net of income taxes.

Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Excludes Selling, General and Administrative Expense.

Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense.

In accordance with the provisions of their lease agreement, this element represents allowable charges due a landlord from its tenant. In retail store and office building leases, for example, tenant reimbursements may cover items such as taxes, utilities, and common area expenses.

Revenue, comprised of base and incentive revenue derived from the management of joint ventures, managing third-party properties, or another entity's operations, and other real estate revenue not otherwise specified in the taxonomy.

This item represents the entity's proportionate share for the period of the net income (loss) of its investee, Alexander's, (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. Such amount typically reflects adjustments similar to those made in preparing consolidated statements, including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets of the investee at the date of investment.

This item represents the entity's proportionate share for the period of the net income (loss) of its investee, Toys "R" Us, (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. Such amount typically reflects adjustments similar to those made in preparing consolidated statements, including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets of the investee at the date of investment.

Adjustment to Additional Paid in Capital resulting from the recognition of deferred taxes for the temporary difference of the convertible debt with a beneficial conversion feature. A beneficial conversion feature is a nondetachable conversion feature that is in-the-money.

This item represents the gross unrealized losses for securities which are categorized neither as held-to-maturity nor trading securities. Such gross unrealized losses are the excess of the carrying value of the Available-for-sale Securities over their fair value as of the reporting date. Such gross unrealized losses are included in other comprehensive income in the statement of shareholders' equity, unless the Available-for-sale Security is designated as a hedge or is determined to have had an other than temporary decline in fair value below its amortized cost basis. All or a portion of the unrealized holding loss of an Available-for-sale Security that is designated as being hedged in a fair value hedge shall be recognized in earnings during the period of the hedge, as should other than temporary declines in fair value below costs basis.

Total of Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity including portions attributable to both the parent and noncontrolling interests (previously referred to as minority interest), if any. The entity including portions attributable to the parent and noncontrolling interests is sometimes referred to as the economic entity. This excludes temporary equity and is sometimes called permanent equity.

Value of stock issued during the period from a dividend reinvestment plan (DRIP). A dividend reinvestment plan allows the holder of the stock to reinvest dividends paid to them by the entity on new issues of stock by the entity.

Adjustment to Additional Paid in Capital resulting from the recognition of deferred taxes for the temporary difference of the convertible debt with a beneficial conversion feature. A beneficial conversion feature is a nondetachable conversion feature that is in-the-money.

This item represents the gross unrealized losses for securities which are categorized neither as held-to-maturity nor trading securities. Such gross unrealized losses are the excess of the carrying value of the Available-for-sale Securities over their fair value as of the reporting date. Such gross unrealized losses are included in other comprehensive income in the statement of shareholders' equity, unless the Available-for-sale Security is designated as a hedge or is determined to have had an other than temporary decline in fair value below its amortized cost basis. All or a portion of the unrealized holding loss of an Available-for-sale Security that is designated as being hedged in a fair value hedge shall be recognized in earnings during the period of the hedge, as should other than temporary declines in fair value below costs basis.

Includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits should not be reported as cash and cash equivalents.

This item represents disclosure of the amount of dividends or other distributions received from unconsolidated subsidiaries, certain corporate joint ventures, and certain noncontrolled corporation; these investments are accounted for under the equity method of accounting. This element excludes distributions that constitute a return of investment, which are classified as investing activities.

The difference between the carrying value and the sale price of real estate or properties that were intended to be sold or held for capital appreciation or rental income. This element refers to the gain (loss) included in earnings and not to the cash proceeds of the sale. This element is a noncash adjustment to net income when calculating net cash generated by operating activities using the indirect method.

This element represents the amount by which the carrying amount exceeds the fair value of the investment. The amount is charged to income if the decline in fair value is deemed to be other than temporary.

The net cash inflow (outflow) for the net change associated with funds that are not available for withdrawal or use (such as funds held in escrow) and are associated with underlying transactions that are classified as investing activities.

Amount of direct costs of an unsuccessful business combination including legal, accounting, and other costs that were charged to expense during the period, but may have been capitalized had the contemplated transaction been completed.

The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities generally involve producing and delivering goods and providing services. Operating activity cash flows include transactions, adjustments, and changes in value that are not defined as investing or financing activities.

The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities include all transactions and events that are not defined as investing or financing activities. Operating activities generally involve producing and delivering goods and providing services. Cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of net income.

Transactions that result in no cash inflows or outflows in the period in which they occur, but affect net income and thus are removed when calculating net cash flow from operating activities using the indirect method. This element is used when there is not a more specific and appropriate element.

Net cash inflow or (outflow) from the amount given in advance to show intention to complete the acquisition piece of land, anything permanently fixed to it, including buildings, structures on it, and so forth.

The cash outflow associated with the purchase of or advances to an equity method investments, which are investments in joint ventures and entities in which the entity has an equity ownership interest normally of 20 to 50 percent and exercises significant influence.

The cash outflow to acquire an agreement for an unconditional promise by the maker to pay the entity (holder) a definite sum of money at a future date. Such amount may include accrued interest receivable in accordance with the terms of the note. The note also may contain provisions including a discount or premium, payable on demand, secured, or unsecured, interest bearing or noninterest bearing, among myriad other features and characteristics.

The cash outflow from the acquisition of a piece of land, anything permanently fixed to it, including buildings, structures on it and so forth; includes real estate intended to generate income for the owner; excludes real estate acquired for use by the owner.

The amount of previously reported deferred or unearned revenue that was recognized as revenue during the period. For cash flows, this element primarily pertains to amortization of deferred credits on long-term arrangements. As a noncash item, it is deducted from net income when calculating cash provided by (used in) operations using the indirect method.

This item represents disclosure of the amount of capital distributions received from unconsolidated subsidiaries, certain corporate joint ventures, and certain noncontrolled corporation; these investments are accounted for under the equity method of accounting.

This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied, including Alexander's and Toys "R" Us. Such amount typically reflects adjustments similar to those made in preparing consolidated statements, including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets of the investee at the date of investment.

The amount of cash paid during the current period for interest owed on money borrowed that is not charged as an expense but rather is capitalized based on the long term nature of the use of the borrowed funds.

Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Vornado is the sole general partner of, and owned approximately 91.9% of the common limited partnership interest in, the Operating Partnership at June 30, 2009. All references to “we,” “us,” “our,” the “Company” and “Vornado” refer to Vornado Realty Trust and its consolidated subsidiaries, including the Operating Partnership.

Substantially all of Vornado’s assets are held through subsidiaries of the Operating Partnership. Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders is dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors.

The accompanying consolidated financial statements are unaudited. In our opinion, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the SEC. The results of operations for the three and six months ended June 30, 2009, are not necessarily indicative of the operating results for the full year.

The accompanying consolidated financial statements include the accounts of Vornado and the Operating Partnership, as well as certain partially owned entities in which we own more than 50%, unless a partner has shared board and management representation and substantive participation rights on all significant business decisions, or 50% or less when (i) we are the primary beneficiary and the entity qualifies as a variable interest entity under Financial Accounting Standards Board (“FASB”) Interpretation No. 46 (Revised), Consolidation of Variable Interest Entities (“FIN 46R”), or (ii) when we are a general partner that meets the criteria under Emerging Issues Task Force (“EITF”) Issue No. 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity when the Limited Partners have certain rights. All significant inter-company amounts have been eliminated. Equity interests in partially owned entities are accounted for under the equity method of accounting if they do not meet the criteria for consolidation and we have the ability to exercise significant influence over the operating and financial policies of the company. Generally an ownership interest of 20% or more is sufficient to demonstrate the ability to exercise significant influence. When partially owned investments are in partnership form, the 20% threshold for equity method accounting is generally reduced to 3% to 5%, based on our ability to influence the operating and financial policies of the partnership. Investments accounted for under the equity method are initially recorded at cost and subsequently adjusted for our share of the net income or loss and cash contributions and distributions to or from these entities. Investments in partially owned entities that do not meet the criteria for consolidation or for equity method accounting are accounted for on the cost method.

We have made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

On January 1, 2009, we adopted FASB Staff Position APB 14-1, Accounting for Convertible Debt Instruments that may be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP 14-1”). FSP 14-1 was required to be applied retrospectively. Accordingly, net income for the three and six months ended June 30, 2008 has been adjusted to include $8,500,000 and $16,900,000, respectively, of additional interest expense, net of amounts attributable to noncontrolling interests. In addition, in accordance with FASB Statement No. 128, Earnings Per Share (“SFAS 128”), we have included 4,850,000 additional common shares in the computation of income per share retroactively to the three and six months ended June 30, 2008, as a result of our first and second quarter common share dividends in 2009. Furthermore, certain prior year balances have been reclassified in order to conform to current year presentation as a result of the adoption of FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51 (“SFAS 160”).

In connection with purchase accounting for H Street, in July 2005 and April 2007 we recorded an aggregate of $222,174,000 of deferred tax liabilities representing the differences between the tax basis and the book basis of the acquired assets and liabilities multiplied by the effective tax rate. We were required to record these deferred tax liabilities because H Street and its partially owned entities were operated as C Corporations at the time they were acquired. As of January 16, 2008, we had completed all of the actions necessary to enable these entities to elect REIT status effective for the tax year beginning on January 1, 2008. Consequently, in the first quarter of 2008, we reversed the deferred tax liabilities and recognized an income tax benefit of $222,174,000 in our consolidated statement of income.

Description containing the consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

In December 2007, the FASB issued Statement No. 141R, Business Combinations (“SFAS 141R”). SFAS 141R broadens the guidance of SFAS 141, extending its applicability to all transactions and other events in which one entity obtains control over one or more other businesses. It also broadens the fair value measurement and recognition of assets acquired, liabilities assumed, and interests transferred as a result of business combinations; and acquisition related costs will generally be expensed rather than included as part of the basis of the acquisition. SFAS 141R expands required disclosures to improve the ability to evaluate the nature and financial effects of business combinations. SFAS 141R became effective for all transactions entered into on or after January 1, 2009. The adoption of SFAS 141R on January 1, 2009 did not have any effect on our consolidated financial statements because there have been no acquisitions during 2009.

In December 2007, the FASB issued SFAS 160, which requires a noncontrolling interest in a subsidiary to be reported as equity and the amount of consolidated net income specifically attributable to the noncontrolling interest to be identified in the consolidated financial statements. SFAS 160 also calls for consistency in the manner of reporting changes in the parent’s ownership interest and requires fair value measurement of any noncontrolling equity investment retained in a deconsolidation. SFAS 160 became effective on January 1, 2009. The adoption of SFAS 160 on January 1, 2009, resulted in (i) the reclassification of minority interests in consolidated subsidiaries to noncontrolling interests in consolidated subsidiaries, a component of permanent equity on our consolidated balance sheets, (ii) the reclassification of minority interest expense to net income attributable to noncontrolling interests, on our consolidated statements of income, and (iii) additional disclosures, including a consolidated statement of changes in equity in quarterly reporting periods.

In March 2008, the FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities – an Amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 requires enhanced disclosures related to derivative instruments and hedging activities, including disclosures regarding how an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), and the impact of derivative instruments and related hedged items on an entity’s financial position, financial performance and cash flows. SFAS 161 became effective on January 1, 2009. The adoption of SFAS 161 on January 1, 2009 did not have a material effect on our consolidated financial statements.

In June 2008, the FASB ratified EITF Issue 07-5, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock (“EITF 07-5”). Paragraph 11(a) of SFAS 133 specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to the Company’s own stock and (b) classified in stockholders’ equity in the statement of financial position would not be considered a derivative financial instrument. EITF 07-5 provides a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the SFAS 133 paragraph 11(a) scope exception. EITF 07-5 is effective on January 1, 2009. The adoption of this standard on January 1, 2009, did not have any effect on our consolidated financial statements.

In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Investments Granted in Share-Based Payment Transactions are Participating Securities (“FSP 03-6-1”). FSP 03-6-1 requires companies to treat unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents as “participating securities” and include such securities in the computation of earnings per share pursuant to the two-class method as described in SFAS 128. FSP 03-6-1 became effective on January 1, 2009 and required all prior period earnings per share data presented, to be adjusted retroactively. The adoption of FSP 03-6-1 on January 1, 2009 did not have a material effect on our computation of income per share.

On January 1, 2009, we adopted FSP 14-1, which was required to be applied retrospectively. The adoption of FSP 14-1 affected the accounting for our convertible and exchangeable senior debentures by requiring the initial proceeds from their sale to be allocated between a debt component and an equity component in a manner that results in interest expense on the debt component at our nonconvertible debt borrowing rate on the date of issue. The initial debt components of our $1.4 billion Convertible Senior Debentures, $1 billion Convertible Senior Debentures and $500 million Exchangeable Senior Debentures were $1,241,286,000, $926,361,000 and $457,699,000, respectively, based on the fair value of similar nonconvertible instruments issued at that time. The aggregate initial debt discount of $212,395,000 after original issuance costs allocated to the equity component was recorded in “additional capital” as a cumulative effect of change in accounting principle in our consolidated statement of shareholders’ equity. We are amortizing the discount using the effective interest method over the period the debt is expected to remain outstanding (i.e., the earliest date the holders may require us to repurchase the debentures), as additional interest expense. Accordingly, interest expense for the three and six months ended June 30, 2008 has been adjusted to include $9,400,000 and $18,700,000 of amortization in the aggregate, or $8,500,000 and $16,900,000, net of amounts attributable to noncontrolling interests. Amortization for periods prior to December 31, 2007 (not presented herein) aggregating $35,552,000 have been reflected as a cumulative effect of change in accounting principle in “earnings less than distributions” on our consolidated statement of changes in equity. Below is a summary of the financial statement effects of implementing FSP 14-1 and related disclosures.

$1.4 Billion Convertible Senior Debentures

$1 Billion Convertible Senior Debentures

$500 Million ExchangeableSenior Debentures

(Amounts in thousands, except per share amounts)Balance Sheet:

June 30,2009

December 31,2008

June 30,2009

December 31,2008

June 30,2009

December 31,2008

Principal amount of debt component

$

1,263,759

$

1,382,700

$

913,219

$

989,800

$

499,982

$

499,982

Unamortized discount

(83,359

)

(106,415

)

(34,222

)

(44,342

)

(18,668

)

(21,726

)

Carrying amount of debt component

$

1,180,400

$

1,276,285

$

878,997

$

945,458

$

481,314

$

478,256

Carrying amount of equity component

$

130,714

$

130,714

$

53,640

$

53,640

$

32,301

$

32,301

Effective interest rate

5.45

%

5.45

%

5.32

%

5.32

%

5.32

%

5.32

%

Maturity date (period through which discount is being amortized)

4/1/12

11/15/11

4/15/12

Conversion price per share, as adjusted

$

157.18

$

148.46

$

87.17

Number of shares on which the aggregateconsideration to be delivered upon conversion is determined

—

(1)

—

(1)

5,736

__________________

(1)

In accordance with FSP 14-1, we are required to disclose the conversion price and the number of shares on which the aggregate consideration to be delivered upon conversion is determined (principal plus excess value.) Our convertible senior debentures require the entire principal amount to be settled in cash, and at our option, any excess value above the principal amount may be settled in cash or common shares. Based on the June 30, 2009 closing share price of our common shares and the conversion prices in the table above, there was no excess value; accordingly, no common shares would be issued if these securities were settled on this date. The number of common shares on which the aggregate consideration to be delivered upon conversion is 8,040 and 6,151 common shares, respectively.

(Amounts in thousands)

Three Months EndedJune 30,

Six Months EndedJune 30,

Income Statement:

2009

2008

2009

2008

$1.4 Billion Convertible Senior Debentures:

Coupon interest

$

9,660

$

9,975

$

19,512

$

19,950

Discount amortization – original issue

1,320

1,400

2,671

2,800

Discount amortization – FSP 14-1 implementation

6,096

5,920

12,276

11,743

$

17,076

$

17,295

$

34,459

$

34,493

$1 Billion Convertible Senior Debentures:

Coupon interest

$

8,856

$

9,062

$

17,826

$

18,125

Discount amortization – original issue

959

1,013

1,940

2,025

Discount amortization – FSP 14-1 implementation

2,567

2,474

5,176

4,901

$

12,382

$

12,549

$

24,942

$

25,051

$500 Million Exchangeable Senior Debentures:

Coupon interest

$

4,844

$

4,844

9,688

$

9,688

Discount amortization – original issue

415

410

774

821

Discount amortization – FSP 14-1 implementation

1,175

1,048

$

2,334

2,076

$

6,434

$

6,302

$

12,796

$

12,585

On May 28, 2009, the FASB issued Statement No. 165, Subsequent Events (“SFAS 165”). Although SFAS 165 does not significantly change current practice surrounding the disclosure of subsequent events, it provides guidance on management’s assessment of subsequent events and the requirement to disclose the date through which subsequent events have been evaluated. SFAS 165 became effective on June 30, 2009. We have evaluated subsequent events through August 3, 2009, the date our consolidated financial statements were available to be issued, for this Quarterly Report on Form 10-Q for the quarter ended June 30, 2009.

On June 12, 2009, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R) (“SFAS 167”). SFAS 167 modifies the existing quantitative guidance used in determining the primary beneficiary of a variable interest entity (“VIE”) by requiring entities to qualitatively assess whether an enterprise is a primary beneficiary, based on whether the entity has (i) power over the significant activities of the VIE, and (ii) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. SFAS 167 becomes effective for all new and existing VIEs on January 1, 2010. We are currently evaluating the impact SFAS 167 will have on our consolidated financial statements.

On June 29, 2009 the FASB issued Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – A Replacement of FASB Statement No. 162 (“SFAS 168”). SFAS 168 establishes the FASB Accounting Standards Codification (the “Codification”) as the primary source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC are also sources of authoritative GAAP for SEC registrants. SFAS 168 and the Codification become effective on September 30, 2009. When effective, the Codification will supersede all existing non-SEC accounting and reporting standards and the FASB will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts. Instead, the FASB will issue Accounting Standards Updates, which will serve only to: (a) update the Codification; (b) provide background information about the guidance; and (c) provide the basis for conclusions on the change(s) in the Codification. The adoption of SFAS 168 and the Codification on September 30, 2009 will not have a material effect on our consolidated financial statements.

Represents disclosure of any changes in an accounting principle, including a change from one generally accepted accounting principle to another generally accepted accounting principle when there are two or more generally accepted accounting principles that apply or when the accounting principle formerly used is no longer generally accepted. Also disclose any change in the method of applying an accounting principle, or any change in an accounting principle required by a new pronouncement in the unusual instance that a new pronouncement does not include specific transition provisions.

FASB Statement No. 157, Fair Value Measurements (“SFAS 157”) defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price).SFAS 157 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Financial assets and liabilities measured at fair value in our consolidated financial statements consist primarily of (i) marketable securities and (ii) the assets of our deferred compensation plan (primarily marketable securities and equity investments in limited partnerships), for which there is a corresponding liability on our consolidated balance sheets. Financial assets and liabilities measured at fair value as of June 30, 2009 are presented in the table below based on their level in the fair value hierarchy.

Fair Value Hierarchy

(Amounts in thousands)

Total

Level 1

Level 2

Level 3

Marketable equity securities

$

107,938

$

107,938

$

—

$

—

Deferred compensation plan assets

70,391

34,223

—

36,168

Total assets

$

178,329

$

142,161

$

—

$

36,168

Mandatorily redeemable instruments (included in other liabilities)

$

57,038

$

57,038

$

—

$

—

Deferred compensation plan liabilities

70,391

34,223

—

36,168

Total liabilities

$

127,429

$

91,261

$

—

$

36,168

The fair value of Level 3 “deferred compensation plan assets” represents equity investments in certain limited partnerships, for which there is a corresponding Level 3 liability to the plan’s participants. The following is a summary of changes in Level 3 deferred compensation plan assets and liabilities, for the three months ended June 30, 2009.

(Amounts in thousands)

Beginning Balance

Total Realized/Unrealized Gains

Purchases,Sales, Other Settlements andIssuances, net

Ending Balance

For the three months ended June 30, 2009

$

32,426

$

2,806

$

936

$

36,168

For the six months ended June 30, 2009

$

34,176

$

1,310

$

682

$

36,168

We have estimated the fair value of all financial instruments reflected in the accompanying consolidated balance sheets at amounts which are based upon an interpretation of available market information and valuation methodologies (including discounted cash flow analyses with respect to our mezzanine loans and debt). Below is a table that sets forth the carrying amounts and fair values of our financial instruments as of June 30, 2009 and December 31, 2008. These fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition of our financial instruments.

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

As of June 30, 2009, we own 32.7% of Toys. We account for our investment in Toys under the equity method and record our 32.7% share of Toys income or loss on a one-quarter lag basis because Toys’ fiscal year ends on the Saturday nearest January 31, and our fiscal year ends on December 31. The business of Toys is highly seasonal. Historically, Toys’ fourth quarter net income accounts for more than 80% of its fiscal year net income. As of June 30, 2009, the carrying amount of our investment in Toys does not differ materially from our share of the equity in the net assets of the parent company.

Below is a summary of Toys’ latest available financial information on a “purchase accounting” basis.

(Amounts in millions)

Balance Sheet:

As of May 2, 2009

As of November 1, 2008

Total assets

$

11,469

$

12,410

Total liabilities

$

10,166

$

11,393

Toys stockholders’ equity

$

1,197

$

929

For the Three Months Ended

For the Six Months Ended

Income Statement:

May 2, 2009

May 3, 2008

May 2, 2009

May 3, 2008

Total revenues

$

2,477

$

2,719

$

7,938

$

8,546

Net (loss) income attributable to Toys

$

(50

)

$

(95

)

$

242

$

144

Alexander’s (NYSE: ALX)

As of June 30, 2009, we own 32.4% of the outstanding common stock of Alexander’s. We manage, lease and develop Alexander’s properties pursuant to agreements, which expire in March of each year and are automatically renewable. As of June 30, 2009 and December 31, 2008, Alexander’s owed us $57,516,000 and $44,086,000, respectively, in fees under these agreements.

Based on Alexander’s June 30, 2009 closing share price of $269.60, the market value (“fair value” pursuant to SFAS 157) of our investment in Alexander’s is $445,937,000, or $277,077,000 in excess of the carrying amount on our consolidated balance sheet.

As of June 30, 2009, the carrying amount of our investment in Alexander’s exceeds our share of the equity in the net assets of Alexander’s by approximately $35,314,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Alexander’s assets and liabilities, to their real estate (land and building). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in Alexander’s net income or loss. The basis difference related to the land will be recognized upon disposition of our investment.

Lexington Realty Trust (“Lexington”) (NYSE: LXP)

As of June 30, 2009, we own 17,058,005 Lexington common shares, or approximately 16.1% of Lexington common equity. Pursuant to the guidance in APB Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock, we account for our investment in Lexington under the equity method because we believe we have the ability to exercise significant influence over Lexington’s operating and financial policies, based on, among other factors, our representation on Lexington’s Board of Trustees and the level of our ownership in Lexington as compared to that of other shareholders. We record our pro rata share of Lexington’s net income or loss on a one-quarter lag basis because we file our consolidated financial statements on Form 10-K and 10-Q prior to the time that Lexington files its financial statements.

As of June 30, 2009, the carrying amount of our investment in Lexington was less than our share of the equity in the net assets of Lexington by approximately $89,026,000. This basis difference resulted primarily from $107,882,000 of non-cash impairment charges we recognized in 2008 based on our conclusion that the decline in the value of Lexington’s common shares was “other-than-temporary.” The remainder of the basis difference related to purchase accounting for our acquisition of an additional 8,000,000 common shares of Lexington in October 2008, of which the majority relates to our estimate of the fair values of Lexington’s real estate (land and building) as compared to their carrying amounts in Lexington’s consolidated financial statements. We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in Lexington’s net income or loss. The basis difference attributable to the land will be recognized upon disposition of our investment.

Based on Lexington’s June 30, 2009 closing share price of $3.40, the market value (“fair value” pursuant to SFAS 157) of our investment in Lexington was $57,997,000, or $10,253,000 below the carrying amount on our consolidated balance sheet. We have concluded that, as of June 30, 2009, the decline in the value of our investment in Lexington is not “other-than-temporary.”

The following is a summary of Lexington’s financial information as of March 31, 2009 and September 30, 2008 and for the three and six months ended March 31, 2009 and 2008.

(Amounts in millions)

As of

As of

Balance Sheet:

March 31, 2009

September 30, 2008

Total assets

$

3,961

$

4,294

Total liabilities

$

2,534

$

2,745

Lexington shareholders’ equity

$

1,334

$

924

For the Three MonthsEnded March 31,

For the Six MonthsEnded March 31,

Income Statement:

2009

2008

2009

2008

Total revenues

$

101

$

105

$

206

$

224

(Loss) income from continuing operations

$

(67

)

$

13

$

(71

)

$

15

Net (loss) income attributable to Lexington

$

(65

)

$

6

$

(83

)

$

37

The carrying amount of our investments in partially owned entities and income (loss) recognized from such investments are as follows:

Investments:(Amounts in thousands)

Balance as of

June 30, 2009

December 31, 2008

Toys

$

374,534

$

293,096

Alexander’s

$

168,860

$

137,305

Partially owned office buildings

159,348

157,468

India Real Estate Ventures

84,052

88,858

Lexington

68,250

80,748

Other equity method investments

309,842

325,775

$

790,352

$

790,154

Our Share of Net (Loss) Income:(Amounts in thousands)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Toys:

2009

2008

2009

2008

32.7% share of equity in net (loss) income

$

(16,220

)

$

(17,798

)

$

79,074

$

60,557

Non-cash purchase price accounting adjustments

13,946

(14,900

)

13,946

(14,900

)

Interest and other income

1,947

1,987

3,800

3,994

$

(327

)

$

(30,711

)

$

96,820

$

49,651

Alexander’s:

32.4% share in 2009 and 32.6% share in 2008:

Equity in net income before reversal of stock appreciationrights compensation expense

$

3,767

$

5,331

$

7,622

$

10,458

Reversal of stock appreciation rights compensation expense

—

(1)

7,157

11,105

6,952

Equity in net income

3,767

12,488

18,727

17,410

Management and leasing fees

2,199

1,979

4,092

4,106

Development fees

648

884

1,928

1,764

$

6,614

$

15,351

$

24,747

$

23,280

Lexington – 16.1% share in 2009 and 7.7% share in 2008 of equity in net (loss) income

$

(6,876

)(2)

$

60

$

(9,915

)(2)

$

1,887

India Real Estate Ventures – 4% to 36.5% share of equity in net loss

(784

)

(614

)

(921

)

(1,028

)

Other (3)

(15,137

)(4)

4,839

(19,504

)(4)

(26,927

)(5)

$

(22,797

)

$

4,285

$

(30,340

)

$

(26,068

)

_________________________

(1)

During the first quarter of 2009, all of the remaining stock appreciation rights were exercised.

(2)

Includes $4,580 for our share of impairment losses recorded by Lexington.

(3)

Includes our equity in net earnings of partially owned entities including partially owned office buildings in New York and Washington, DC, the Monmouth Mall, Dune Capital LP, Verde Realty MLP and others.

(4)

Includes $7,650 of expense for our share of the Filene’s, Boston lease termination payment.

(5)

Includes $34,200 of non-cash charges for the write-off of our share of certain partially owned entities’ development costs.

Below is a summary of the debt of partially owned entities as of June 30, 2009 and December 31, 2008, none of which is guaranteed by us.

100% ofPartially Owned Entities’ Debt at

(Amounts in thousands)

June 30,2009

December 31, 2008

Toys (32.7% interest) (as of May 2, 2009 and November 1, 2008, respectively):

$804 million secured term loan facility, due 2012, LIBOR plus 4.25% (4.57% at June 30, 2009)

798,000

797,000

Senior U.K. real estate facility, due 2013, with interest at 5.02%

526,000

568,000

7.625% bonds, due 2011 (Face value – $500,000)

488,000

486,000

7.875% senior notes, due 2013 (Face value – $400,000)

379,000

377,000

7.375% senior notes, due 2018 (Face value – $400,000)

337,000

335,000

4.51% Spanish real estate facility, due 2013

173,000

167,000

$181 million unsecured term loan facility, due 2013, LIBOR plus 5.00% (5.32% at June 30, 2009)

180,000

180,000

Japan bank loans, due 2011 – 2014, 1.20% – 2.80%

152,000

158,000

Japan borrowings, due 2010 – 2011 (weighted average rate of 0.97% at June 30, 2009)

227,000

289,000

6.84% Junior U.K. real estate facility, due 2013

93,000

101,000

4.51% French real estate facility, due 2013

84,000

81,000

8.750% debentures, due 2021 (Face value – $22,000)

21,000

21,000

Other

119,000

73,000

5,660,000

6,100,000

Alexander’s (32.4% interest):

731 Lexington Avenue mortgage note payable collateralized by the office space, due in February 2014, with interest at 5.33% (prepayable without penalty after December 2013)

368,357

373,637

731 Lexington Avenue mortgage note payable, collateralized by the retail space, due in July 2015, with interest at 4.93% (prepayable without penalty after December 2013)

320,000

320,000

Rego Park construction loan payable, due in December 2010, LIBOR plus 1.20%(1.52% at June 30, 2009)

217,054

181,695

Kings Plaza Regional Shopping Center mortgage note payable, due in June 2011,with interest at 7.46% (prepayable without penalty after December 2013)

197,422

199,537

Rego Park mortgage note payable, due in March 2012 (prepayable without penalty) (3)

78,246

78,386

Paramus mortgage note payable, due in October 2011, with interest at 5.92% (prepayable without penalty)

68,000

68,000

1,249,079

1,221,255

Lexington (16.1% interest) (as of March 31, 2009 and September 30, 2008, respectively)Mortgage loans collateralized by the trust’s real estate, due from 2009 to 2037, with a weighted average interest rate of 5.90% at March 31, 2009 (various prepayment terms)

2,330,791

2,486,370

_____________________________

(1) On July 9, 2009, Toys issued $950 million aggregate principal amount of 10.75% Senior Unsecured Notes due 2017 at 97.399%. The proceeds from the issuance, along with existing cash, were used to repay the outstanding balance under its senior credit facility, which was subsequently terminated.

(2) On June 24, 2009, Toys extended this credit facility, which was to expire in July 2010, to May 2012. The borrowing capacity under the amended facility will remain at $2.0 billion through the original maturity date in July 2010 and will continue at $1.5 billion thereafter. The interest rate will be LIBOR plus 3.20%, which may vary based on availability, through July 2010 and LIBOR plus 4.00%, subject to usage, thereafter.

(3) On March 10, 2009, the $78,246 outstanding balance of the Rego Park I mortgage loan, which was scheduled to mature in June 2009, was repaid and simultaneously refinanced in the same amount. The new loan bears interest at 75 basis points, is secured by the property and is 100% cash collateralized. The proceeds of the new loan were placed in a non-interest bearing restricted mortgage escrow account.

(Amounts in thousands)

100% ofPartially Owned Entities’ Debt at

Partially owned office buildings:

June 30,2009

December 31, 2008

Kaempfer Properties (2.5% and 5.0% interests in two partnerships) mortgage notes payable, collateralized by the partnerships’ real estate, due 2011, with a weighted average interest rate of 5.63% at June 30, 2009 (various prepayment terms)

$

142,254

$

143,000

100 Van Ness, San Francisco office complex (9% interest) up to $132 million construction loan payable,due in July 2013, LIBOR plus 2.75% (3.06% at June 30, 2009) with an interest rate floor of 6.50% and interest rate cap of 7.00%

85,249

85,249

330 Madison Avenue (25% interest) up to $150,000 mortgage note payable, due in June 2015, LIBOR plus 1.50% (1.82% at June 30, 2009)

70,000

70,000

Fairfax Square (20% interest) mortgage note payable, due in November 2009, with interest at 7.50%

Waterfront Associates, LLC (2.5% interest) construction and land loan up to $250 million payable, due in September 2011 with a six month extension option, LIBOR plus 2.00% - 3.00% (3.51% at June 30, 2009)

130,720

57,600

Verde Realty Master Limited Partnership (8.5% interest) mortgage notes payable, collateralized by the partnerships’ real estate, due from 2009 to 2025, with a weighted average interest rate of 5.93% at June 30, 2009 (various prepayment terms)

Monmouth Mall (50% interest) mortgage note payable, due in September 2015, with interest at 5.44% (prepayable without penalty after July 2015)

165,000

165,000

San Jose, California Ground-up Development (45% interest) construction loan, due in March 2010, $100 million fixed at 3.30%, balance at LIBOR plus 2.54% (2.92% at June 30, 2009)

132,570

132,128

Wells/Kinzie Garage (50% interest) mortgage note payable, due in December 2013, with interest at 6.87%

14,732

14,800

Orleans Hubbard Garage (50% interest) mortgage note payable, due in December 2013, with interest at 6.87%

10,153

10,200

Other

438,277

468,559

Based on our ownership interest in the partially owned entities above, our pro rata share of the debt of these partially owned entities was $3,068,868,000 and $3,196,585,000 as of June 30, 2009 and December 31, 2008, respectively.

Equity investment disclosure, or group of investments for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20% of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

The following is a summary of our investments in mezzanine loans as of June 30, 2009 and December 31, 2008.

(Amounts in thousands)

Interest Rate as of

Carrying Amount as of

Mezzanine Loans Receivable:

Maturity

June 30, 2009

June 30, 2009

December 31, 2008

Equinox

02/13

14.00%

$

92,003

$

85,796

Tharaldson Lodging Companies

04/10 (1)

4.62%

76,253

76,341

Riley HoldCo Corp

02/15

10.00%

74,437

74,381

280 Park Avenue

06/16

10.25%

73,750

73,750

Charles Square Hotel, Cambridge

(2)

(2)

—

41,796

Other, net

01/14-12/18

4.75%-12.00%

97,565

120,475

414,008

472,539

Valuation allowance (3)

(122,738

)

—

$

291,270

$

472,539

__________________

(1)

The borrower has a one-year extension option.

(2)

On June 1, 2009, this loan, which was scheduled to mature in September 2009, was repaid.

(3)

Represents loan loss accruals on mezzanine loans based on our estimate of the net realizable value of each loan. Our estimates are based on the present value of expected cash flows, discounted at each loan’s effective interest rate, or if a loan is collateralized, based on the fair value of the underlying collateral, adjusted for estimated costs to sell. The excess of the carrying amount over the net realizable value of a loan is recognized as a reduction of “interest and other investment (loss) income, net” in our consolidated statement of income.

Schedule of amounts representing an agreement for an unconditional promise by the maker to pay the Entity (holder) a definite sum of money at a future date, net of any write-downs taken for collection uncertainty on the part of the holder. Such amount may include accrued interest receivable in accordance with the terms of the note. The note also may contain provisions and related items including a discount or premium, payable on demand, secured, or unsecured, interest bearing or noninterest bearing, among myriad other features and characteristics.

In accordance with the provisions of FASB Statement No. 144, Accounting for the Impairment and Disposal of Long- Lived Assets, we have classified the revenues and expenses of properties and businesses sold or to be sold to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all periods presented in the accompanying consolidated financial statements.

The following table sets forth the assets and liabilities related to discontinued operations at June 30, 2009 and December 31, 2008.

(Amounts in thousands)

Assets related to Discontinued Operations as of

Liabilities related to Discontinued Operations as of

June 30, 2009

December 31,2008

June 30,2009

December 31,2008

H Street – land under sales contract

$

108,292

$

108,292

$

—

$

—

The following table sets forth the combined results of operations related to discontinued operations for the three and six months ended June 30, 2009 and 2008.